ELINFRASTRUKTURUDVALGET Technical report on the future expansion and undergrounding of the electricity transmission grid Summary April 2008 Technical report on the future expansion and undergrounding of the electricity transmission grid Summary One of the energy-political objectives is to increase the share of renewable energy to at least 30 per cent of the energy consumption in 2025.1 The Danish government also wants to ensure that the overall objectives on security of supply, environmental protection and high competitiveness are met in a cost-effective manner. An adequate and robust electricity transmission grid is a precondition for realising the energy- political objectives on the environment, security of supply and market development in the energy sector. The electricity transmission grid must therefore be continuously expanded and adapted concurrently with the integration of large volumes of renewable energy and the expansion of trading capacities to neighbouring areas. In the continued development of the EU's single energy market a decisive precondition will be the ability of the infrastructure to handle the transmission of considerable energy volumes – often across national borders – and thus reduce congestion in the market. This would limit the individual players' possibilities of using their market power to influence price formation to the detriment of enterprises and households. As a part of the TEN activities (Trans European Network) the EU has pointed to a number of specific interconnections between the countries that need to be built or expanded. This includes a spectrum of tie-lines in Denmark and from Denmark to Norway and Germany. So far, the planning of this expansion has been based on the then Danish Ministry of the Environment and Energy’s principles for the establishment and upgrading of high-voltage installations from 1995 with subsequent updates – most recently in connection with the Danish government’s Energy Strategy 2025 from June 2005. The current guidelines can be seen in Appendix 2. In addition to the quantification and specification of the expected expansion requirement, it has also been deemed expedient to establish the basis for systematic assessment of the considerations on which the planning of the expansion of the electricity transmission grid is to be based. On this background, the former Danish Transport and Energy Minister set up the Electricity Infrastructure Committee in the summer of 2007, which was tasked with preparing a technical report on the future expansion of the electricity transmission grid. 1.1 The Electricity Infrastructure Committee's mandate According to its mandate, the Committee is to prepare a technical report describing and quantifying the total expansion requirement and the tasks to be solved by the electricity infrastructure when it comes to integrating renewable energy and local electricity generation, maintaining the security of supply and facilitating the electricity market at transmission level. The technical report is also to comprise an analysis of the potential future grid structures based on various long-term grid expansion strategies. This must include various scenarios for the development of the overall Danish energy system. Furthermore, the report is to provide an analysis of the increasing use of underground cables instead of overhead lines in the Danish 400 kV grid. 1 On 21 February 2008, the Danish government made a broad political energy agreement. In the agreement, the parties involved have, among other things, agreed to the erection of new offshore wind turbines with an installed capacity of 400 MW by 2012, which is more or less in line with the assumptions used by the Committee in its work. The Committee is of the opinion that the energy agreement does not change the Committee's results. 2/28 Technical report on the future expansion and undergrounding of the electricity transmission grid Against the backdrop of these analyses, the technical report is to propose a number of specific models for the future expansion of the electricity infrastructure based on various technological possibilities. The technical report is to identify the environmental/landscape, technical, cost-related and socio- economic consequences of the individual expansion models. It must also include an assessment of the impact on electricity prices. The aim is for the alternatives to fulfil comparable requirements as regards security of supply, market expansion and integration of large volumes of renewable energy in accordance with the objectives laid down in the government's Energy Strategy. The alternatives must also be assessed on the possibility of interaction with foreign countries. As reference, Energinet.dk's present plan for the long-term electricity infrastructure based on the existing principles for electricity infrastructure expansion is used. 1.2 Defining the report The Electricity Infrastructure Committee has drafted a technical report on the possible future principles for the expansion and undergrounding of the electricity grid. The Committee was tasked with ensuring that the suggested grid expansion principles are sufficiently broad and robust to support the security of supply and market functioning when using various combinations of interconnections and domestic electricity generation equipment. The report does not, however, provide a detailed analysis of the optimum solution for expanding the overall electricity system seen from a socioeconomic point of view. The specific infrastructure expansions will be analysed further when the decision basis for the individual investments is prepared. In the continued work, account must be taken of the changed framework conditions in Denmark and the neighbouring areas which are important to the Danish energy system. It is vital to stress that the integration of large volumes of wind power into the electricity system entails a considerable need for exchanging electricity with neighbouring areas. Trading via strong interconnections is a precondition for ensuring appropriate utilisation of the rest of the Danish electricity generation system, which must be maintained to a certain extent in order to safeguard the stability and security of supply in the Danish system. This report does not present any conclusions as to which specific development of the electricity generation equipment is the most likely or directly necessary in order to maintain the security of supply. Likewise, the report does not provide any analysis of the possible lack of expansion of interconnections to neighbouring areas. As such, the calculation of the market costs related to grid congestion only includes costs resulting from congestion in the internal Danish transmission grid – ie costs of congestion in interconnections are left out. Finally, it should be noted that the timely implementation of the expansion principles is entirely dependant on the public authorities' consideration of the project being made much more flexible. In future, steering committees and working groups should, for example, be set up in connection with the planning of electricity transmission projects. The Danish Energy Authority, the Danish Ministry of the Environment as represented by the Danish state's regional environmental centres, the municipalities affected, Energinet.dk, the regional transmission companies and other relevant authorities should have a seat on these groups so that the two approvals required under the Danish Electricity Supply Act and the Danish Spatial Planning Act are coordinated to a greater extent. The Committee has not additionally considered the procedures currently applied by public authorities in their consideration of electricity infrastructure facilities. 3/28 Technical report on the future expansion and undergrounding of the electricity transmission grid 1.3 Main conclusions with regard to the expansion principles The electricity grid must be expanded through coherent, long-term, controlled development, maintaining the security of supply and supporting the functioning of the electricity market in the best possible manner. The expansion must furthermore take account of the continued technological development, the environment, including landscape considerations, and the socioeconomic framework. Today, the overall electricity grid consists of approx. 1,100 km of 400 kV power lines and 3,000 km of 132 kV and 150 kV power lines. The 400 kV grid is the backbone of the Danish electricity system and can in popular terms be described as the motorways of the electricity system. By way of comparison, the 132 kV and 150 kV grids can be considered the main roads of the electricity system. At the 400 kV level, approx. 165 km of power lines have been placed underground, 80 of which are AC cables. At the 132 kV and 150 kV levels approx. 600 km of power lines have been placed underground. Table 1 provides an overview of the share of cables and overhead lines in the existing grid and the estimated costs of undergrounding the remaining overhead lines. Voltage level Total no. of km Km of cable Km of overhead Costs of burying line remaining overhead lines (DKKbn) 6-20 kV 61,566 53,428 8,138 32 30-60 kV 8,465 2,760 5,705 7-8 132-150 kV 4,062 611 3,451 11.5 220-400 kV 1,478 164 1,314 37 Table 1 Distribution of cables and overhead lines in the existing grid and the costs of undergrounding. All lengths are given in system kilometres.3 It is highly probable that the entire distribution grid below 100 kV will be buried in the ground within the time horizon used in these analyses. If increased undergrounding of the overall transmission grid is required, this can be done at the 132 kV and 150 kV levels without any significant technological problems. Increased undergrounding of 400 kV power lines is, however, a major technical challenge. It is also considerably cheaper to place the 132 kV and 150 kV grids underground than is the case with the 400 kV grid. The Committee has assessed the environmental, security of delivery4, market-related and socioeconomic aspects of six different expansion principles; two of which are not considered appropriate, being unable to support the environmental and energy political objectives to the 2 An overall estimate, which is highly uncertain.